Lori Lange was pregnant with her first child when she started browsing the Internet for deals on strollers and bassinets. Instead, she came across information about a baby accessory that caught her by surprise: her own child’s umbilical cord blood.

Traditionally, the placenta and umbilical cord have been thrown away at birth as medical waste. But new research shows that blood from the afterbirth, like bone marrow, is rich in valuable stem cells, which can be transplanted to cure life-threatening diseases.

Stem cells in the umbilical cord are so immature they can become any blood components–red cells, white cells or platelets–and replace damaged ones. The most common diseases treated with these procedures are myelogenous leukemia, sickle cell anemia, Fanconi’s anemia and some metabolic diseases and immunodeficiencies.

Armed with research promising important medical value, about 15 biotech companies have sprung up to offer families the chance to collect the blood from their baby’s umbilical cord at birth, and then freeze and store it. Many of them call it “biological insurance”– something to fall back on in case the child or a sibling develops a deadly disease treatable with the cord blood or its derivatives. The companies charge $300 to $1,500 to collect the blood and usually another $100 a year to store it.

“Once you start looking into it, it’s almost as though you can’t turn back,” Lange said. “Because if there’s a chance to save your child, you will take it.”

But there’s another option–a growing public reserve of cord blood, similar to the national bone marrow registry. Patients without a private cord blood sample can search for a genetic match among the approximately 40,000 units of donated cord blood across the world–a supply that many institutions are hoping to expand with public education.

Obstetricians are conflicted over whether to encourage parents to pay for the individual service or to donate to the public supply– which could improve the chances for survival for a larger group of people. And once they hear from their doctors, parents must make the choice.

Cord blood is winning over the transplant community. Collecting it is a far less invasive procedure than collecting bone marrow, and research suggests that cord blood is more likely to succeed in a transplant. A study published in June in the New England Journal of Medicine found that children who received cord blood from their siblings were about half as likely to reject the transplant–or develop a “graft vs. host” disease–as children who received bone marrow. Cord blood donors are also easier to find, because the genetic match does not need to be as close.

Cord blood can be retrieved for only about 15 minutes after a baby is born. After the cord is cut, an obstetrician collects a few ounces from the cord with a syringe; it’s then tested for infectious disease, frozen and stored. The blood is thawed when and if needed.

In those cases, the transplants work by transfusion; after doctors destroy the diseased bone marrow in the patient (through drug therapy and irradiation), the cord blood is dripped into the patient’s veins and circulated through the body. The stem cells make their way to the bone marrow, where they begin to rebuild the blood cells.

Cord blood transplants have generated a number of celebrated cases- -primarily among children, because their smaller size requires fewer stem cells. The first successful transplant occurred in 1988, when a 5-year-old with Fanconi’s anemia was cured by a stem cell transplant from his newborn sister’s cord blood. In 1993, an infant with acute lymphoblastic leukemia received one of the first cord blood transplants from a nonrelative, and is now a healthy 7-year-old. Last year, a Westminster, Md., boy with Fanconi’s anemia received a transplant from his newborn sister after his family banked her cord blood privately; he is now considered free of disease. And a 35-year- old woman from Paris is on tour internationally to talk about her successful transplant five years ago to cure her chronic myelogenous leukemia.

But as crucial as cord blood transplants are for those who have had them, it’s hardly a common procedure. Most oncologists consider stem cell transplants only after all other treatments, including chemotherapy, have been exhausted. Since the first success story, only about 1,500 people worldwide have had cord blood transplants– but many more are preparing for the possibility.

Lori Lange had no reason to think her child would ever need a stem cell transplant; blood disease does not run in her family. But she knew a child’s future health is never guaranteed. She talked with three companies and settled on a Boston-based company, Viacord, after watching the firm’s sales video.

“Remember, the umbilical cord is your baby’s lifeline during pregnancy,” the video said. “Now, it could potentially be your family’s lifeline.”

Lange asked her in-laws for the $1,500 collection fee as a baby shower gift; she pays the annual storage cost. While her son Nicholas, now 2, is thriving and healthy, she says she’ll also bank the blood of her next child.

“If something ever happened, and say, your child did come down with leukemia, and you had said, ‘No, I’m not going to spend this money to save this blood for him,’ I don’t think you could ever forgive yourself,” Lange said.

Viacord officials consider such peace of mind the mark of a satisfied customer, but many medical professionals worry that parents are being coerced through guilt into buying something they have only a remote possibility of needing–or using successfully.

The Cord Blood Registry of San Bruno, Calif., which bills itself as the largest private cord blood bank in the country, has stored 18,000 cord blood units and only used 10 of them in transplants– each for a family with a previously known history of disease that can be treated with transplants. Viacord has banked 4,000 units and only used five –all for families with a sibling who was already sick.

In almost every case in the United States where a family was caught by surprise by a deadly disease and a transplant was needed, a cord blood match was found at a public blood bank, such as those housed at Georgetown University Medical Center, the New York Blood Center, UCLA or Duke University.

That’s one reason several major medical organizations, as well as many researchers, recommend against spending the money to bank your own baby’s cord blood.

“We need a lot more information before I would recommend to a patient, who has limited funds, who has their own anxieties about a pregnancy, before I tell this couple you need to spend a couple of thousand dollars for something that may never be used,” said Lucy Bayer, an obstetrician conducting a long-term study on the viability of stem cells at Bay State Medical Center in Springfield, Mass.

The American College of Obstetricians and Gynecologists writes that “parents should not be sold this service without a realistic assessment of the likely return on their investment–parents and grandparents should not be made to feel guilty if they are not eager or able to invest these considerable sums in such a highly speculative venture.”

According to the American Academy of Pediatrics, “private storage of cord blood as biological insurance is ‘unwise’–families may be vulnerable to emotional marketing at the time of birth of a child.”

Researchers at the National Institutes of Health (NIH), which has funded a $30 million national study of cord blood transplants, are skeptical of private cord blood banking.

“I would not be spending money myself on private cord [blood] banking if I were to have a baby,” said LeeAnn Jensen, an immunologist who is overseeing NIH’s cord blood study. “We don’t know of any reason why you should do it.”

But industry officials say people buy insurance for all sorts of remote possibilities.

“What are the odds my house will burn down? . . . What are the odds I’ll get in a car accident and I’ll need my air bag?” said Stephen Grant, spokesman for the Cord Blood Registry. “They all vary. The issue is, you’re doing all these things just in case.”

Still, researchers say, the consumer doesn’t realize all the unknowns of cord blood banking–for instance, how long stem cells will last in suspension. The oldest sample of frozen cord blood is seven years old. And Bayer’s research has shown that many cells die in the freezing or thawing process. “We don’t know if these stem cells will be viable 10 years down the line,” said Bayer, “and in the meantime, you’ve spent a lot of money paying for these cells to be suspended and frozen, and who’s held liable if it doesn’t work?”

The Food and Drug Administration is working on guidelines for cord blood collection. Given the room for error, Jensen says, many doctors who perform stem cell transplants are wary of working with private banks. “They switch babies at birth; they can switch cord blood units in the lab.”

The clincher for Jensen is the scientific case against using your own blood in a transplant–also known as an “autologous” donation: Recent studies at the New York Blood Center show that getting cord blood from unrelated donors may be just as good as, and in some cases better than, receiving one’s own blood back.

“If somebody has a genetic disease, it is present in their bone marrow or cord blood,” said Pablo Rubenstein, head of the immunogenetics laboratory at the New York Blood Center. “It’s giving them the same diseased genetic system.”

Rubenstein recommends private blood banking only for families who have one child with a genetic disease and another baby on the way. In those cases, the cord blood from the newborn might be a good match for the older sibling.

Commercial banks, however, stand to lose about 90 percent of their clientele with that approach. And Grant says there are still plenty of diseases contracted later in life that could be treated with autologous transplants.

Although blood banks are trying to increase the public supply through education, many have had trouble financing cord blood collection.

Biotech entrepreneurs say that with 4 million births in the United States every year, there’s no reason public and private supplies can’t exist simultaneously. “This is about having a choice–if the cord blood were donated, you can’t guarantee it would be there for you from a public bank,” said Cynthia Fisher, CEO of Viacord.

Rubenstein says public blood banks would be happy to return a cord blood sample to a particular family, should they later need it, but he acknowledges that that blood may be gone.

All parties agree that the future of cord blood is promising. Scientists are experimenting with cord blood for treating everything from breast cancer to spinal cord injuries.

Medical ethicists worry about consumer protections in such a speculative and emotional industry. “Almost everyone will pay literally everything they have to either get cured, or at least have the hope they’re going to live longer,” said George Annas, head of Boston University’s health law department. “And you can multiply that by infinity when you ask parents how much would you pay to let your child live a healthier life.”

Last year, Annas criticized the commercialization of cord blood in the New England Journal of Medicine. He also wrote that it muddies the relationship between patients and obstetricians, who might have a business alliance with cord blood companies.

That alliance varies from company to company. Viacord officials, for instance, say they have no formal relationship with hospitals, although they do send maternity wards literature and videos and offer to train doctors in cord blood collection.

The Cord Blood Registry admits to closer ties. Grant says that his company has “partnership agreements” with about 40 hospitals, including the Greater Baltimore Medical Center, in which the company offers to cover some costs and give discounts for its service at that hospital.

Columbia Hospital for Women in Washington went through the process of becoming a Cord Bank Registry partner but pulled out at the last minute after its medical staff objected, according to hospital spokeswoman Tamara Ward.

The Cord Bank Registry also has a “preferred provider” network. Network doctors are obliged to have all their patients sign a “consent form”–even patients who don’t want to bank their baby’s cord blood. Patients who decline have to acknowledge that they understand the value of cord blood and knowingly decline the service. The form includes the company’s toll-free phone number, but the form is not identified as company literature.

Whether or not the medical establishment approves, companies are expecting private blood storage will become a standard birthing option. Industry experts say business has doubled in the last year alone.

Lori Lange says she went into cord banking with her eyes wide open- -aware that the deal was speculative. “They’re not guaranteeing anything, except for saving and keeping the blood for you. They’re not promising that this is going to save your child’s life,” she said.

But as she plays on her living room floor with her 2-year-old, she says even a tiny bit of security is worth a lot. “We buy insurance policies, we do a lot of things, for the ‘what if,’,and this is one of those things for us,” Lange said. “I think this is just the beginning, and to save it now is something you won’t be able to do once all these new cures come out of it.”